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Money matters:
Graham Macdonald
MBMG International Ltd.
Nominated for the Lorenzo Natali Prize
Why this recovery won’t work
In a Utopian world there would be no problems. The printing
presses would be going 24/7 and this would be the cure for everything getting
better. Unfortunately, we do not live in Utopia but the real world.
To put things succinctly, there are five good reasons why the present situation
will not improve and it only needs one of them to cock things up. Just ask
William Hill what odds you would get for none of them to happen. This means that
there are going to be problems over the next couple of years. So what have we
got to be worried about?
Not enough government money
One economist at Arbuthnot’s does not actually believe that the
increase in commodity prices and inflation will cause too many problems to the
recovery process. Apparently, oil will not return to the highs of last year and
any global growth will not be enough to warrant such levels.
However, the advisor does think the increasing fiscal deficits of the western
world are a real reason to worry as the recovery is driven by what will happen
in America. As we have recently seen, there have been reasons for optimism
(however false) but the problems of the biggest debts in history will have to be
addressed. Basically, sometime in the near future, President Obama will have to
haul back on his fiscal stimulus.
Great Britain is no better with Gordon Brown lurching from one catastrophe to
another. The growing deficit there is of prime importance. Whoever gets in next
May will have to cut back on government borrowing by introducing spending cuts
and raising taxes. This will take demand out of the economy.
Hyper-inflation
Everyone has been worrying about deflation but it will probably be
inflation that causes the real problems. Many analysts now believe it will be
the threat of this that will reduce the present ‘recovery’ to that of a damp
squib. This is especially so with commodities prices on the up again with gold
breaking the USD1,000 per oz recently.
Nassim Taleb is another who reckons that the never-ending monetary interventions
will, in reality, lead to complete instability in prices all over the world. He
recently stated, “Policy makers have no control over the outcome of their
actions. The plane they are flying will either hit the mountain, which is
hyperinflation, or crash in the ocean, which is deflation. There is a chance of
the pilot hitting the runway. But if he is not skilled, it is less than he
thinks.”
Patrick Gordon, from Killik & Co, thinks governments will leave rates too low
and not put them up in time; “I think if anything it will take too long to turn
off the taps. It is not in the interests of the authorities to increase funding
costs by raising costs to borrow.” This is definitely a pointer to higher
inflation. Many strategists think Gordon is right. Keeping rates at an all time
low is meant to encourage people to start borrowing again. This will increase
the demand for raw materials and so cause the speculation on such things as the
price of oil. If the cost of oil continues to go up then people have less to
spend. Unfortunately, most people think the pilot still needs further training…
Bond yields
These could be another problem. The increase in yields in America and
Great Britain may stifle any long term recovery. The reason for this is that it
will make it much harder for the central authorities to keep interest rates so
low. If this happens then mortgages will go up again and the whole property
cycle could start all over again as housing prices will carry on going down
which will give the banks and other lending institutions problems. Basically,
the higher the bond yield the more problems there are for the financing of
property loans.
No recovery in America
Without doubt the recovery, when it does happen, will be better in
the East. The danger is that the West will not get to share in it at all. From a
global economic point of view, this may not be a bad thing but, it must be
conceded, the West may not see it this way. Why would it be no bad thing? Well,
the East and especially China has been almost awash with so much money over the
last couple of decades that they have basically been funding the deficits which
have occurred in the West. There is a need to re-balance this. China is now
concentrating more and more on its own domestic market which is no bad thing but
it does not help America or Europe.
On top of this the US has rather a lot of government debt coming up on to the
markets. As bond yields are rising and investors may take profits and run this
would cause any potential recovery to fall flat on its face.
Eurozone
The PIGS (Portugal, Italy [and Ireland now] Greece and Spain are
really in the muck. When they have been in the pooh before they have been able
to devalue their own local currencies and so fight their way out of whatever the
crisis has been. No such option for them now as they are in the euro.
Also, Germany needs to use fiscal and monetary stimulus to lower its present
surplus. If it does not then it could mean another major problem in Europe. This
would be heightened by unemployment getting higher in Germany and deleveraging.
It is unlikely but the aforementioned PIGS may have to de-link from the euro
until they can sort out their own economies. They may even lose their own
sovereign status. If the EU is not careful there could be another Asian-type
crisis. Guarantees need to be put in place.
One economist has stated, “The market spreads on sovereign bonds imply that such
guarantees are almost certain, first from the IMF, then from the European
Investment Bank and ultimately from the German government itself. And the
markets may well be right, since it is clearly in the interests of the German
government to prevent a European financial crisis.” But then it was clearly in
the interests of the US government to guarantee the obligations of Fanny Mai and
prevent the bankruptcy of Lehmann - and we all know what happened next.
As we inferred at the beginning, there is a high chance of at least one of the
above happening so there will definitely be another retracement, but this one
could be worse than the last one.
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The above data and research was compiled from sources
believed to be reliable. However, neither MBMG International Ltd nor its
officers can accept any liability for any errors or omissions in the above
article nor bear any responsibility for any losses achieved as a result of any
actions taken or not taken as a consequence of reading the above article. For
more information please contact Graham Macdonald on
[email protected]
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Snap Shots: by Harry Flashman
Three dimensional photography
The accepted definition of photography is “painting with light” as what
you are doing is using light in all its directions and intensities to
illuminate your subject, before you record it on film or in electronic
pixels. However, that is really only part of the art of photography. The
other part is to paint with dark, which we call ‘shadow’.
 Circle
or ball?
When a young photographer first gets his ‘professional’ lighting
equipment, he or she tends to flood everything with enormous light
levels and from all directions. Every part of every subject is totally
covered with the light, and the new young photographer is delighted with
the fact that there are no dark corners left unlit.
Unfortunately, there is something missing from these types of shots. A
certain lack of form or shape. The only contrast in the final photograph
relies totally on color. Yellows on blue are very popular under these
circumstances. I, too, in my early days, have photographed a model in a
yellow dress against a blue doorway. Super shot, but missing something.
 Ansel
Adams and the use of shadow.
The item that was missing is the third dimension. On any photograph you
get a two dimensional image - height and width. However, the third
dimension, depth, is totally missing. This third dimension, the
so-called 3D effect can only be produced by some visual ‘trickery, which
we call ‘shadow’. It is the shadow which differentiates a circle from a
ball, but if you blast the spherical subject with so much light that
there is no shadow, the final result has no shape, no depth, no 3D
effect.
This is why the photographer has to use shadow to give the impression of
the third dimension. This makes a 2D image look like a 3D one, and is
done by careful manipulation of both the lighting and the shadows.
 Flash
on side bracket.
Take the outdoors situation, for example. We always suggest to the
novices that they should photograph early in the morning or late in the
afternoon. Do not shoot in the middle of the day. One reason for this is
because in the early mornings and late afternoons the lighting (from the
sun) is directional, skimming along the top of the earth’s surface, and
makes for plenty of shadow. In the middle of the day, however, the sun
is directly overhead and does not make for pleasant shadows, and even
landscapes will look flat and featureless. Look at some of the famous
landscapes done by Ansel Adams and you will see what I mean. For a
photographer, the middle of the day is purely for siestas, not for
photography. It does mean that you get up at some dreadful early hours
in the morning to drive to the location, but the end result is worth it.
One of the problems with new digitals is the powerful on-camera flash.
This pops up at any time and overpowers the natural lighting, and being
centrally mounted makes for a photograph flooded with light, but no real
shadow. If you disable the on-camera flash, you will also get better
photographs, other than after sundown, where you need some light source
to be able to register an image.
If you must use flash, then use a flash mounted off-camera, so that the
lighting is coming slightly from the side of the line of view between
the camera and the subject.
The important message in all this is to remember that while you may be
painting with light, it is the shadow that gives your photographs the
third dimension.
Modern Medicine:
by Dr. Iain Corness, Consultant
Fast weight loss - the answer?
I published this “diet” only a few months ago, but since then
I have been inundated with emails asking me for the ‘recipe’ again, as they
have lost the original. Unfortunately I can do nothing about the Alzheimers,
but those who have stuck it out claim that the weight loss is spectacular.
I first got wind of this program after I noticed a friend of mine had
dropped some weight. “Fifteen kilos in two months,” was his proud reply. He
had done this by following a “diet” - and one that had obviously worked!
This is put forward as a seven day diet, and although I am not always in
favor of ‘crash’ diets, this one does merit some study. It is reputedly from
Sacred Heart Memorial Hospital and is used in their cardiac care unit for
overweight patients to lose weight prior to surgery.
It states the first no-no’s as being bread, alcohol, soft drinks, fried food
or oil. Agree totally, though probably half of you have already decided it’s
too hard!
After that there is a concoction called Fat-Burning Soup (FBS) which you
make up and keep in the fridge. You gobble FBS any time you feel hungry and
have as much as you want. You are also advised to drink plenty of water
suggesting 6-8 glasses a day along with tea, coffee, skim milk, unsweetened
juice or cranberry juice.
The physiology of hunger works that when the stomach is empty, messages are
sent to the brain to send down food. Fill the belly with non-fattening food
and the hunger pangs will be less, but the weight does not go on.
Here is the recipe for the Fat-Burning Soup:
4 cloves garlic
2 large cans crushed tomatoes (810gms)
2 large cans beef consommé
1 packet vegetable packet soup
1 bunch spring onions
1 bunch celery
2 cans French beans (or fresh)
2 green capsicum
1 kg carrots
10 cups water
Chop all veggies into small pieces. Boil rapidly for 10 minutes stirring
well and then simmer until veggies are tender. Add water if necessary to
make a thinner soup.
Now the other downside to dieting is food boredom. A week of FBS, water and
cranberry juice will sap the resolve of most overweight people, so what this
diet does is allow you to add different items on a daily basis. Here are the
suggestions.
Day 1, any fruit except bananas. Eat only soup and fruit today.
Day 2, all vegetables. Eat as much as you like of fresh, raw or canned
vegetables. Try to eat green leafy vegetables. Stay away from dry beans,
peas, and corn. Eat vegetables along with soup. At dinner reward yourself
with a jacket potato and butter.
Day 3, eat all the soup, fruit and veggies you want today. Don’t have the
jacket potato today. If you have not cheated you should have lost approx 3
kg. (If that is so, it is an amazing loss in three days - but keep going
anyway!)
Day 4, bananas and skim milk. Eat at least 3 large bananas and drink as much
skim milk as you can today. Eat as much soup as you want. Bananas are high
in calories and carbohydrates, as is the milk but you will need the
potassium and carbohydrates today.
Day 5, beef and tomatoes. You may have 600 gm of beef or chicken (no skin)
and as many as 6 tomatoes. Eat soup at least once.
Day 6, beef and vegetables. Eat to your hearts content of beef and veggies.
You can even have 2-3 steaks (grilled) if you like with leafy green
vegetables. No baked potato. Be sure to eat soup at least once.
Day 7, brown rice, vegetables, fruit juice. Be sure to eat well and eat as
much soup as you can.
By the end of the first month, if you have not cheated, you should have lost
7 kg. The theory is good, but I caution against losing too much, too soon.
If your weight loss needs are greater than 7 kg, then continue for another
week, but I do not recommend much further than two weeks at one time, and do
not repeat the program within three months.
Heart to Heart with Hillary
Dear Hillary,
Help me please. I’ve been here on holidays now for two weeks and I find the
women here in Thailand are just the best eye candy I have ever seen, but all
they want is my money, and they have so many reasons that I should give it to
them that it is just amazing. Amazing Thailand as they say. What should I do,
Hillary? Give them money or what? I sure like having them around me, but at this
rate I won’t have enough left to eat by the end of the month. I’m 52, by the
way.
Mike
Dear Mike,
You don’t say where all your begging eye candy comes from, my Petal, but let me
guess. From the bars, right? That is how they operate. Find a new customer,
drape themselves all over him, make him feel like he is some irresistible young
buck again, and they have you hooked. Once you’re hooked, the next item is to
land you, and they’ve done that when you pay for the vet’s fees for the ailing
family buffalo, shortly after there will be medical bills for the brother with
the broken leg after the motorcycle accident. Remember to offer to buy him
another motorcycle as well, it will only cost you another 40,000 baht. Chicken
feed. If you have a really thick wallet, then building a new house for Mama and
Papa puts you right up to the top of the tree - that is, until you return to
your home wherever, and another 52 year old from Sweden takes over. Honestly
Mike, this behavior is so well documented, I find it amazing that there are
still people who fall for all this. Amazing Thailand indeed!
Dear Hillary,
Thanks for my weekly chuckle, although sometimes you can be just a little catty
with your replies, but all in all I reckon you are doing a great job for all the
tourists who come over with no idea about what’s up or down. This place sure is
some kinda culture shock the first time, but after you learn how to handle it,
it’s a ton of laughs and costs pennies to enjoy yourself, right up to making a
pig of yourself, which I admit I’ve done a few times, but as long as you keep
your baht in a tight pocket, there’s no real problems.
Jerry
Dear Jerry,
I’m afraid people still get into problems - look at Mike’s letter above yours.
Bit worried about you keeping money in a “tight pocket”, Petal - it could be
hers and not yours! By the way, you will notice that I cleaned up your spelling
and grammar somewhat. “Culture” is spelled with a C not a K, for example. What
do they reach you all in schools these days?
Dear Hillary,
I have had a long term girlfriend here - not from a bar, but a young woman who
works in a shop. She has looked after me for three years every time I come to
Thailand, which is about two times a year for a couple of weeks at a time. She
has never suggested there might be a sick buffalo somewhere, and never even asks
for money. I did buy her some sunglasses on one trip, movies and dinners, but
that’s it really. I am getting tired of the relationship now and just want to
end it with no fights or screaming matches. I believe there is another chap
somewhere on the scene too. She hasn’t done anything wrong, but it’s time to
move on. How should I go about it? In the UK I would just sit down with the girl
and talk and end things on a kind note, buy her a beer and say goodbye. Thailand
is a different kettle of fish altogether I believe, even with no promises of
marriage, no money changing hands except for dinner and movies every now and
again, but I’m told the Thai girls can be real narky if the relationship
finishes. I just want things to be easy. No fuss, no hassles.
Freedom Fighter
Dear Freedom Fred,
You really are the heart and soul of generosity, aren’t you. Now to your problem
and the parting of the ways for you and your long term girlfriend. Looking
dispassionately at the situation, in three years you bought her a pair of
glasses! 175 baht from the stall at the side of the road! (I am presuming that
the gift was spectacles, and not a couple of drinking glasses.) And you are
worried about how to amicably end the relationship! Just sit her down, as you
would do in the UK, and tell her to put the glasses on and look carefully at
you. She should see just what a cheap Charlie you really are, and will run for
cover like a startled gecko. As far as her having another male interest, can you
blame her? You gave her no money, no gold, no promises of marriage, but took her
for dinner and a movie “every now and again.” I feel sorry for the poor girl,
she must be soft in the head, as well as being blind, to put up with someone as
mean as you for so long.
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
The Hangover: US/ Germany, Comedy – A Las Vegas-set comedy
about a bachelor party gone very wrong. Three friends lose their
about-to-be-wed buddy during their drunken misadventures, then must
retrace their steps in order to find him. With a clever script and
hilarious interplay among the cast, the film nails the right tone of
raunchy humor, and the non-stop laughs overshadow any flaw. Rated R in
the US for pervasive language, sexual content including nudity, and some
drug material. Generally favorable reviews.
Echelon Conspiracy: US, Action/ Mystery/ Thriller – Shane West as a
winsome hero in this Big-Brother-informed noir-mystery nightmare.
Lightweight yet complexly conspiratorial, the film takes inspiration
from the vast array of paranoia thrillers of yesteryear. Some of it
shot in Bangkok. Generally unfavorable reviews.
Law Abiding Citizen: US, Drama/ Thriller – An everyday guy decides
to take justice into his own hands after a plea bargain sets his
family’s killers free. His target: The district attorney who
orchestrated the deal. Stars Jamie Foxx and Gerard Butler. Rated R in
the US for strong bloody brutal violence and torture, a scene of rape,
and pervasive language. Opens today in the US.
The Ugly Truth: US, Comedy/ Romance – The consensus seems to be
that, despite the best efforts of Gerard Butler and Kathrine Heigl, this
film suffers from a weak script, with little charm or comedic payoff.
Heigl plays a producer of an early morning news program low in the
ratings. Her boss brings in a macho local cable personality whose ideas
about the battle of the sexes date back to the cavemen. Rated R in the
US for sexual content and language; 18+ here. Generally unfavorable
reviews.
Killshot: US, Action/ Crime/ Thriller – Released on DVD last year,
but deserves a better fate. Filmed nearly four years ago, the
picture suffered through endless rounds of editorial indecision,
reshooting, and the embarrassment of a pathetic five-screen theatrical
release in the US earlier this year. Nevertheless, this film as
directed by John Madden (Shakespeare In Love) is mostly a taut
thriller about a couple who are in way over their heads after getting
wrapped up in a con by a scam artist and his partner, who is also a
hitman. It’s ultimately Mickey Rourke who makes the film worth
watching. Rated R in the US for violence, language and brief nudity.
Mixed or average reviews.
Sorority Row: US, Horror/ Thriller – A group of sorority sisters try
to cover up the death of their house-sister after a prank gone wrong.
Rated R in the US for strong bloody violence, language, some sexuality/
nudity and partying(!) Generally unfavorable reviews.
Whiteout: US/ Canada/ France, Action/ Crime/ Mystery/ Thriller – The
consensus is that the film has moribund pacing and an uninspired plot.
Kate Beckinsale plays a US Marshal assigned to Antarctica who must
investigate Antarctica’s first homicide within three days before winter
begins. Rated R in the US for violence, grisly images, brief strong
language, and some nudity;13+ here. Generally unfavorable reviews.
Public Enemy Number One Part 2: France/ Canada, Action/ Biography/
Crime/ Drama – The story of notorious French gangster Jacques Mesrine.
In this follow-up film to Public Enemy No. 1 director
Jean-Francois Richet follows Mesrine’s success in the underworld as well
as his fascinating attempt at escape. In French with English and Thai
subtitles. At Major Cineplex only.
G-Force: US, Action/ Adventure/ Family – A pleasant, inoffensive
animated farce about a team of superspy guinea pigs, with non-stop manic
action. Mixed or average reviews.
District 9: South Africa/ New Zealand, Drama/ Sci-Fi/ Thriller –
Technically brilliant and emotionally wrenching, with all the elements
of a thoroughly entertaining science-fiction classic. Rated R in the US
for bloody violence and pervasive language. Generally favorable
reviews.
Phobia 2 / Haa Phrang: Thai, Horror – A five-part horror anthology
by five different Thai directors. It’s a mixed bag, but I’m rather fond
of it and think it’s well worth checking out if you at all like Thai
horror films.
The Sanctuary / Sam Pan Bohk: Thai, Action – Martial arts movie
starring Pairote “Mike B” Boongerd, as a descendent of an ancient race
of warrior palace guards, sworn to protect a royal treasure. In Thai
and English. At Big C only.
Pandorum: US/ Germany, Horror/ Sci-Fi/ Thriller – The story of two
astronauts who awaken in a sleep chamber aboard a seemingly abandoned
spacecraft. Rated R in the US for strong horror violence and language.
Generally unfavorable reviews.
The Proposal: US, Comedy/ Romance – With Sandra Bullock, Ryan
Reynolds. A pushy boss forces her young assistant to marry her in order
to keep her Visa status in the U.S. and avoid deportation to Canada.
Mixed or average reviews
Oh My Ghosts / Hortaewtak 2: Thai, Comedy/ Horror – Usual Thai
comedy featuring popular Thai comedians. Three companions in garish
drag are frightened by horrible ghosts that haunt their dorm. At Big C
only.
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